Zuniga, Inc $=250$ Units $40 \%$ Complete
Direct Materials Costs

question 55

Multiple Choice

Zuniga, Inc. uses a process costing system. During May, 1,200 units were transferred into Department 2 at a cost of $38,040. Direct materials are added at the beginning of the process. Additionally: On May 1: Beginning inventories $=250$ units, $40 \%$ complete
Direct materials costs $=\$ 1,250$
Conversion costs $=\$ 1,356$
Transferred-in costs $=\$ 2,560$

During May: Direct materials costs incurred $=\$ 6,000$ Conversion costs incurred $=\$ 17,013$

On May 31: Ending Inventories $=350$ units, $20 \%$ complete Using the weighted average method, the total transferred-in costs for the month were:

• A) $38,040
• B) $40,600
• C) $30,800
• D) $33,360

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Definitions:

Credit Extension

The act of a lender increasing the amount of credit available to a borrower or the period over which repayment can be spread.

Receivables Financing

A type of financing in which a company uses its accounts receivable as collateral to secure a loan.

Terms of Sale

The conditions under which a seller will complete a sale, typically covering payment terms, delivery times, and warranties.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.